Offshore Coding Work Raises Security Concerns

[InfoSec News <isn () c4i org>]

http://www.computerworld.com/securitytopics/security/story/0,10801,80935,00.html

By DAN VERTON 
MAY 05, 2003
Computerworld 

MYRTLE BEACH, S.C. -- IT professionals are raising serious questions
about the U.S. software industry's reliance on overseas software
developers, arguing that the practice puts companies and the U.S.  
economy at risk.

A recent study by Gartner Inc. predicts that by 2004, more than 80% of
U.S. companies will consider outsourcing critical IT services,
including software development, to countries such as India, Pakistan,
Russia and China. But some users said the trend needs to be given a
sanity check in light of recent changes in the global security
environment.

At last week's Techno-Security Conference here, users peppered a panel
of corporate security officers with questions about the wisdom of
outsourcing software development to cheap labor overseas, where there
is little or no way to ascertain the security risk that workers may
pose.

Of particular concern to some attendees is the work that is being sent
to China. While not yet a major provider of outsourcing services,
China has a significant economic espionage program that targets U.S.  
technology, the users noted. Also of concern are countries in
Southeast Asia, particularly Malaysia and Indonesia, where terrorist
networks are known to exist.

Speaking directly to Oracle Corp. Chief Security Officer Mary Ann
Davidson, one audience member said that it's "ironic that the
countries the software industry trusts the least with binary code are
the places where source-code development is being sent."

Davidson acknowledged that Oracle, which sells its software to all of
the major U.S. intelligence agencies, does outsource some of its
development work to companies in India and China. However, "we give
read access, not write privileges, to developers in India," she said.  
"And for the work done in China, it's quality control, and they do not
need source-code access to do that."

Although Davidson acknowledged that there is "a national security
issue" involved in moving development work overseas, she said there is
also no guarantee that a worker who is a U.S. citizen won't
intentionally harm source code.

The economic situation today is such that "you can't build these
products without non-U.S. citizens," said Davidson. "Whether you like
it or not, our national secrets are already being preserved by people
who built these parts of the core infrastructure, and they're not U.S.  
citizens."

Assessing Risks

Tim McKnight, chief information assurance officer at Los Angeles-based
Northrup Grumman Corp. and a former security officer at Cisco Systems
Inc., said companies must put in place a verification and auditing
process. And he said that effort will be costly.

"At Cisco, we had teams that would go overseas and verify the people
that were there, monitor their access to file servers and source-code
servers and do risk assessments," said McKnight. "It is very difficult
to truly know who these people are. It can be done, [but] you really
need buy-in from the top of the corporation."

A show of hands during the closing session of the conference indicated
that the majority of attendees doubted the ability or willingness of
software companies to conduct proper background investigations of
foreign software coders working overseas.

That's not surprising, given that few companies in the U.S. conduct
background investigations on IT personnel, said Joyce Brocaglia, CEO
of Alta Associates Inc., a Flemington, N.J.-based executive search
firm. "I'm surprised at how few of my clients actually do background
checks on their information security professionals," she said. "At
most, they require me to do a reference check."



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